Can Corporate Fleets Kickstart the Electric Vehicle Industry?

Last week, GE committed to the single largest electric vehicle purchase commitment ever—25,000 EVs over the next five years for the company fleet. The move suggested that commercial fleets can be a powerful driving force in the nascent EV industry. The Electrification Coalition (EC), a group made up of auto and power industry executives, confirms it with the Fleet Electrification Roadmap, a report that makes the business case for the 16 million electric fleet vehicles in the U.S.

As the GE purchase demonstrated, corporations have the cash to buy large amounts of EVs. That means a big purchase can quickly ramp up battery and parts production in the EV supply chain—a benefit for both fleets and private EV customers. But that's not the only reason why EVs make sense for fleets. The EC explains:

Most significantly, fleet owners may be more willing than individual consumers to focus on total cost of vehicle ownership as opposed to upfront costs. This approach advantages the economic dynamics of electric drive vehicles in cases where the higher upfront costs vis-à-vis an internal combustion engine vehicle can be demonstrably offset through lower operating and maintenance costs over time.

Fleets also can take advantage of cheap commercial and industrial electricity rates. That's something private EV consumers lack. And since many fleets have predictable delivery routes — think UPS — range anxiety is not a major concern.

In order for EVs to become attractive to fleets, the U.S. government will have to implement a number of policy changes. The EC has a laundry list of suggestions, including temporary point-of-sale purchase incentives, tax credits for private fleets, and renewable energy bonds for a fleet vehicle charging infrastructure.

Even without these policies in place, some fleets will still go for EVs. GE, for example, has a stake in the EV supply chain: the company manufactures EV charging stations. If the report's suggestions are put into place, fleet
adoption could result in 200,000 EVs and PHEVs
on the road by 2015.

The EC has influenced U.S. government policy before—policy suggestions from the 2009 Electrification Roadmap were included in legislation approved by the Senate Energy and Natural Resources Committee. It's not unthinkable, then, that the EC's latest suggestions could solidify into real policies.